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Friday, 06 May 2016

STRUCTURED FINANCE: CBRC grants Rmb5bn auto loan ABS quota

The China Banking Regulatory Commission has granted quotas totalling Rmb5bn (US$826m) to six non-bank financial institutions to issue asset-backed securities.

The latest batch of auto loan ABS approvals in China, which is also the largest, involves several foreign and joint-venture firms, namely Ford Motor Finance (China), BMW Automotive Finance (China),  Volkswagen Finance China, Dongfeng Nissen Motor Finance and Toyota Motor Finance (China) and Sany Auto Finance, according to market sources. Formal submissions were heard to have been already sent to the CBRC for individual issuance approval and a go-ahead from the Peoples’ Bank of China is also needed before they can hit the market.

Earlier this week, IFR London reported that Volkswagen Finance had mandated HSBC as financial adviser and CICC as lead underwriter on its inaugural Chinese auto loan ABS, Driver China One. The fixed-rate renminbi-denominated notes are expected to be rated local AAA, while the structure will closely follow VW’s global Driver standard. The bonds will be settled on-shore as a domestic inter-bank bond placement, and will be available for international investors with onshore renminbi or offshore RQFII quotas.

So far, only GMAC-SAIC Automotive Finance has issued two Rmb2bn auto-loan ABS deals and SAIC Finance issued Rmb1bn ABS in the onshore market.

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